New Lawsuit Filed Against Xapo Founder Wences Casares

Wences-Casares-Xapo
22 September 2016

Identity-theft protection company Lifelock has filed another lawsuit against Wences Casares, founder of bitcoin wallet company Xapo.

The suit was filed on Monday in Delaware Chancery Court against Casares and his former CFO at digital wallet startup Lemon, Cynthia McAdam, who currently serves as president and general counsel for Xapo.

LifeLock has alleged that the two withheld intellectual property related to Xapo and bitcoin integration software for Lemon that should have been included a 2013 acquisition of the startup by LifeLock, according to Courthouse News.

The suit also alleges that both Casares and McAdam worked on developing Xapo during a transition period when they were under the employ of Lifelock.

The complaint states:

“Defendants’ post-merger employment was little more than a ruse because while employed by Lemon, in Lemon offices, on Lemon computers and on Lemon-owned cloud server accounts, during Lemon-paid business hours, and using Lemon IP, defendants simply plotted their exit to Xapo while devoting the majority of their time to developing Xapo products.”

Lifelock filed a similar lawsuit last year against Casares in the Superior Court of the State of California, a suit which was eventually dismissed.

Within a month of the first report of the original California suit, Casares filed a cross-complaint at California’s Superior Court, alleging that LifeLock had “squandered the success of its acquired company, and then sought to blame everyone but themselves for their mistakes”.

Earlier this year, that first case was dismissed. Lifelock has appealed the dismissal, a process which has met with additional delays. The most recent complaint was filed in Delaware because a stipulation in the merger agreement, according to a Lifelock representative.

Suits tied to Lemon purchase

In December 2013, Lifelock purchased Lemon for $42.6m. Shortly after the acquisition of Lemon, Casares announced the launch of bitcoin wallet company Xapo, along with $20m in new venture capital. Four months later, Xapo raised an additional $20m from Greylock Partners and Index Ventures.

LifeLock says it bought the digital wallet company for its intellectual property, including the wallet “to securely store private credit card and other account information on their smart phones,” according to the suit.

In comments, Ragland was dismissive of LifeLock’s latest attempt to sue.

“Whatever their motivations are, they’ve obviously decided to throw even more money into what I consider a personal vendetta,” he told CoinDesk.

LifeLock did not immediately respond to a request for comment.